Lingering cash and debt management challenges continue to dilute employee confidence and overall financial wellness. The 2011 PricewaterhouseCoopers Financial Wellness Survey reveals almost half, 49%, of working American adults, find it difficult to meet their household expenses on time, up from 43% in 2010. The survey, which incorporated the views of 1,610 adults making at least $30,000 annually, also found that 36% of those who annually earn $100,000 are also feeling the financial crunch.

“Everyone’s headaches are the same,” says Allison. “Executives may buy bigger houses, have bigger mortgages and support bigger debt, but today’s overall economic challenges—concern over job stability and the potential loss of an earner in a dual income household—provide the same stresses to executives as they do to other workers.”

By just focusing on long-term savings and promoting auto enrollment in retirement plans, employers are short changing their employees, experts say, because the core financial issues facing consumers in the post-recession world are not being addressed.

The 2008 financial meltdown hit Main Street hard, and 38% of survey respondents say they are saving less overall this year compared to last and almost one third, 32%, believe they’ll need to use their retirement plans to pay for expenses other than retirement. Only 33% of employees surveyed are confident they’ll be able to retire when they want to, and 46% plan to retire later than previously planned.

Unfortunately, Allison says, many employers continue to address the retirement savings crisis via auto-enrollment and auto-escalation features in company retirement plans. In fact this practice may actually exacerbate employees’ existing financial situations and add to their worries. “You can’t just tell people to blindly save.”

With that said, Mark Murphy president and chief executive officer, Northeast Private Client Group, advises employees should strive to save at least 15% to 20% of their pretax income—and this does not just mean saving in a 401(k), an IRA or other retirement asset.

“Any other formula has a high probability of failure,” Murphy says. “I’ve seen people who have increased their salaries 10 to 20 fold over time, who have never had the discipline to save, and they never developed financial independence in a 30 to 40 year career span.”

Hazy Planning for the Future

Allison recommends that employers “take a step back” to address the real issues, but the burden still needs to be placed on employees for securing their own financial safety nets.

“More than the nice lunch, the bouquet of flowers or the gold watch at retirement, employees will appreciate that their employer has grown them in business and financially and provided them with the tools and techniques to leave their careers with a meaningful amount of wealth,” says Murphy. “The cherry on the cake for employees is that they’ve been able to retire in the life style to which they’ve become accustomed.”

But almost half of employees surveyed, 48%, say they are uncomfortable selecting investments, this is consistent with 52% in 2010.

What’s more, there is a large gap between the comfort levels of women, with 58% saying they are uneasy investing compared to 35% of men.

“The myriad of investments and the pressure around performance cause people to be hesitant to make investment decisions,” says Allison, noting that “throwing” more information and complex terminology about how to analyze investments only adds to the confusion causing “deer in the headlights syndrome.”

Companies have a fiduciary responsibility to analyze and monitor funds in the retirement plans they are offering so that employees can feel more confident.

Companies must also not lose sight of the importance of asset allocation. “We have to go back to basics so as not to overwhelm,” says Allison. “Over 90% of a portfolio’s return is dictated by asset allocation.”

According to Allison, many people look for that one great stock, but this tack undermines the fundamental philosophy of diversifying assets.

Plus, everyone’s tolerance for risk is different. “Less people seem to have the stomach to take risk for greater returns but instead are trying to take a hard look at what they actually need to retire comfortably.”

Changing Credit Card Habits

Nearly one-quarter, 24%, of employees surveyed say they use credit cards to buy monthly necessities because they can’t afford them otherwise, an increase of nine percentage points from 2010. Among those earning $100,000 or more annually, that number jumps to 34%.

And half, 50%, of survey respondents consistently carry balances on credit cards, a number on par with the 51% reported in this PwC survey category last year. More compelling, 42% of respondents find it difficult to make minimum credit card payments on time, up from 28% in 2010.

Allison says people need to learn to embed thoughtfulness into spending, an approach which occurs more readily if and when people pay with cash. An employer may have to refer an employee to an Employee Assistance Provider to relearn more judicious ways of spending. “It is not solely the responsibility of the employer to serve as educator and coach. There are outside services to facilitate action.”